Markets snap 5-day fall as Nov inflation eases

Last updated on: December 14, 2012 16:13 IST

Indian shares snapped five-day losing streak on Friday led by buying in rate-sensitive sectors after lower-than-expected November inflation rekindled hopes of a rate cut by the central bank at its monetary policy meet next week.

November inflation rate eased to 7.24% from 7.45% a month earlier, compared to analysts estimate of 7.6% aided by easing annual fuel and manufacturing inflation.

Market experts, however, believe that the central bank is unlikely to cut interest rates on December 18 monetary policy and will wait for more evidence that inflation is on an easing trend before lowering lending rates by early next year.

The Bombay Stock Exchange's Sensex index gained 88 points or 0.5% to end at 19,317.25 while the National Stock Exchange's Nifty-50 index rose 28 points or 0.5% to end at 5,879.60.

Asian shares ended the last day of week on a mixed note as robust China's manufacturing data raised hopes of growth recovery in world's second-biggest economy, however, looming fiscal cliff concerns in US pushed investors to book profits.

Among automobiles, Tata Motors and Mahindra and Mahindra rose over 1% while SBI and ICICI led in banking arena gaining 3% and 1% each on

BSE.

The laggards include, BHEL which fell 1.4%, Bharti Airtel dropped 1.5% while Dr Reddy's and Cipla fell over 1% each in closing deals.

Bharti Airtel, country's biggest mobile-phone operator's arm, Bharti Infratel's initial public offering for up to $830 million was fully covered on Thursday amid lukewarm response from retail and NIIs.

The other notable movers include, fertiliser companies that rallied up to 18% in opening deals after the Cabinet Committee on Economic Affairs (CCEA), on Thursday, approved a urea investment policy, which is likely to incentives fertilizer companies to set up new plants and expand existing capacity.

Tata Motors extended Thursday's gains triggered by its British car unit Jaguar Land Rover reporting good November sales.

The stock ended up 1%.

ABG Shipyard gained 2% after the company has bagged a repeat order worth Rs 485 crore from the Ministry of Defence for building an additional cadet training vessel for the Indian Navy.

Honeywell Automation India dipped almost 7% iintra-day after its promoter - Honeywell Asia Pacific Inc. - fixed the floor price for the offer-for-sale (OFS) at Rs 2,150, a 10% discount to Thursday's closing on the BSE.

Geodesic fell 5% for eighth day in a row, and was locked in lower circuit at Rs 29.45 with no buyers on the counter after the company said that lenders have invoked large number of pledge shares held by them.

The BSE mid-cap rose 0.6% while small-cap gained 0.1%.

The overall breadth was negative as 1,470 stocks declined while 1,455 stocks advanced on the BSE.